Taxpayer Numbers Surge as Frozen Thresholds Push Millions into Higher Brackets

New HMRC data reveals a significant rise in higher-rate taxpayers, driven by fiscal drag and stagnant income tax thresholds.

The number of higher-rate taxpayers in the UK rose by 680,000 to 5.1 million in the 2022-23 tax year, marking a 15% increase compared to the previous year.
Fiscal drag, caused by the freeze on income tax thresholds since 2021, has led to more individuals being pushed into higher tax brackets as wages increase.
The number of additional-rate taxpayers paying the 45% tax rate on incomes above £125,140 increased by 49,000 to 600,000 in the same period.
Retired baby boomers now contribute more income tax than workers under 30, with over-70s paying £19.1 billion in 2022-23 compared to £18.3 billion by under-30s.
The tax threshold freeze is expected to remain until at least 2028, with projections suggesting millions more will be affected by higher rates in the coming years.